Sometimes great ideas can be repeated—and sometimes they can’t.

After I sold Merrin Financial, my contract stated that I had to work at ADP, the large corporation that acquired us, for a minimum of two years. To stay true to my entrepreneurial side while I was working for ADP, I bought a software technology that was in the middleware space from a public company and created a company around it called Vie Systems.

Middleware software was all the rage in the late 1980s. It was a technology that enabled the creation of faster data integrations between different software packages and systems. Data integration was a huge issue for every company and consumed a majority of many companies’ technology resources and time. We experienced this with every sale we made of our order management system (OMS) platform, so I knew the problem well and had been searching for a solution for the past several years. We came upon this technology and, as we were doing our due diligence, found out that the company was running out of cash.

This technology was right up my alley because it increased efficiency, it solved a huge problem, and the prospect base was virtually unlimited. It enabled nonprogrammers to quickly integrate new software into their existing infrastructure and integrate data more easily into disparate systems. This so-called software “glue” was sold to large companies as a way to significantly reduce the number of resources and time needed for data system integration. Vie had a platform that enabled virtually any company to do this—not just large enterprises. That was a worthwhile proposition, and I knew it offered great promise. This was the right software at the right time.

I believed—incorrectly—that this was such a winning proposition that it couldn’t go wrong. I wasn’t quite ready to start another company; I was busy with my new job (albeit an entirely unfulfilling one), and I didn’t have a lot of free time. I therefore decided to put in place the day-to-day management of Vie and took a seat on the board. I tapped former employees of Merrin Financial to run the company, and we waited for the product to sell. The problem? It never sold.

I soon learned one of the most important lessons in business: A great product is not enough. Excellent sales and excellent management are always required.

When it comes to building a business, nothing goes according to plan. When the plan needs to be altered or when you hit a crisis, that’s when you define whether you are good at business or not. Business is just a series of problems that have to be solved, and how well you solve them is the determining factor of how good of a businessperson you are. Those who are successful see when they are running straight into a wall—and they swiftly move to avoid it. Maybe they go over it or maybe they go around it, but they surely make some kind of move to ensure they don’t smack into it.

We didn’t see the wall. We ran right into it.

Our “wall” was how we positioned the product and how we approached selling it. Our approach was, in one word, wrong. It turned out that one of the greatest virtues of middleware—its wide breadth and ability to solve an enormous number of problems—also presented its biggest challenge. The software can be deployed in any company, in any vertical, across a very wide range of problems. That sounds like a lot of greenfield, but in reality it was our albatross. We went into a variety of companies, offering a very broad solution. We expected customers to come up with the specific use and left it to them to identify their problem that could be fixed with our middleware. When you sell something, you have to solve a specific problem—you can’t sell a solution to all problems.

It took us way too long to recognize this fact. After a year of running into the same wall, we finally decided to stop what Einstein deemed as insanity and decided do something different to achieve the results we expected. We let go of the broad-brush approach and shifted our strategy to sell a much more targeted and industry-specific solution. Geoffrey Moore’s book Crossing the Chasm provides a detailed solution to this type of problem. He wrote that while you can get early adopters to buy your solution, there is a great chasm that every company must cross to reach mainstream adoption by the majority of its prospects—the pragmatists. The strategy to do that is to focus on a single vertical or industry with a specific solution until you have enough customers, references, and successes to convince others in that industry that your product or service is tried, tested, and ready for prime time adoption. That was the strategy we ultimately adopted.

The first focus was on financial services, a logical place to start as it was an area we all knew well. The plan was to follow the advice in Moore’s book and establish a presence in this space and grow references and referrals within this vertical.

With this new strategy we puttered along for another year, but we weren’t making a serious dent in the software universe that we wanted. The management team had frittered away a year trying to sell into multiple verticals, and it became more and more clear that it wasn’t the right team to lead this company. I recognized that turning it around would cost significant resources and time, and it was not something I was eager to take on.

Once again, just as things were looking pretty bleak, luck came our way and saved us. The founders and original owners of the technology had filed for a patent, which had not yet been granted when we bought it, but was issued right as we were struggling with what to do with the company. This created value in the platform, and all of a sudden our company was worth something to other middleware companies, which led us to an inflection point.

I knew about these windows of opportunity from the sale of Merrin Financial. I had two choices: I could invest more money and change the management team, or I could sell the company. It was an obvious decision.

We fielded several offers, including one from a public database company that had invested in diversifying into middleware solutions. It was a solid deal, my two years with ADP were up, and I was personally ready to move on. I wanted to change the world, and while this was an exciting and difficult challenge, I viewed it more as an investment than a mission that I wanted to dedicate myself to. It was time to look for a new opportunity. We struck the deal while I was on another ski vacation and I signed the papers eager to take on the next mountain.

Don’t Invest In Something You Know Nothing About

It wasn’t long before something came along that really excited me. It was what I thought was an amazing idea in the health care industry. Through a complicated string of family relations, I was introduced to a medical doctor in Silicon Valley, who was also a great technologist. He had started a software company that aimed to save the lives of intensive care patients through real-time data and data visualization.

Similar to what we did at Merrin Financial, this would take manual processes and computerize them, but this time it would save lives—a truly noble cause and right in my wheelhouse. Anyone who has entered a hospital knows how scary and inefficient the health care system can be. At a trillion dollars per year, it is one of the largest industries in the country and arguably the most inefficient. It shouldn’t be too hard to create technology that would bring efficiencies to this enormous problem.

In the late 1990s, patients brought to the intensive care unit (ICU), depending on their condition, were immediately hooked up to a number of machines that monitor and record the patient’s vital signs. The problem was that when the nurse recorded the vital signs, the information from the computer was transcribed to a paper chart. Paper charts can’t take the data from multiple machines, analyze, or predict what is happening with the patient in real time and, therefore, cannot save lives or improve the health of the patient at the time they are most in need. The information on the patient chart was also vital to many other parts of the hospital, including billing, compliance, reimbursement, inventory, and more, which would all benefit from straight-through processing systems, just as the financial industry had.

The medical software founder occasionally called me for advice about running the company and raising money. I was very impressed with the questions he asked and his worthwhile mission. After six months of these consultations, he asked if I wanted to invest. I was intrigued and inspired: I put in $500,000.

What was I thinking? Sadly, it went something like this, “I know everything there is to know about technology; therefore, let me invest money in an industry I don’t really know anything about and it will pay off huge.” I’ll spare you the suspense and tell you up front, that was a huge mistake.

After six months the founder came back to me and said, “I spent all the money.” Alarmingly, he had very little to show for it. I had a decision to make. I could cut my losses and move on or I could double down, fund the technology further, and go to Silicon Valley and run this thing. After all, my previous experience at Vie showed me what happened when I put other people in charge of managing a company. I decided I would go out to Silicon Valley, become CEO, and help the founder run the company.

I thought Silicon Valley was where the big boys played. And now, after the sale of two companies (Merrin Financial and Vie Systems), I thought I was God’s gift to software. At this time, I literally thought I could invest in an industry that I knew nothing about and go to a coast where nobody knew me and where I had no connections, and yet I would be very successful.

Furthermore, I was swept up by the cause. What propelled me most was that this idea was something I believed in, something I found meaningful. I was game to bring the principles of technology and efficiency to health care—there was certainly room and reason for it. Because of my success with Merrin Financial, I knew exactly what to do. Rinse and repeat, right? Wrong and wrong. More like a recipe for disaster.

Every month I flew to Silicon Valley and stayed for two weeks. The accommodations weren’t glamorous. I lived at the Creekside Inn, a motel right on a stream in Palo Alto. It had a little convenience store in the parking lot. I worked long hours and returned to my room and dined on beef jerky and potato chips for dinner.

Yet I didn’t mind because there was so much to love about Silicon Valley. I loved Palo Alto. I loved the sun. I loved Stanford. I loved going south to the beach. I loved the healthy lifestyle—beef jerky and potato chip diet nothwithstanding. I loved meeting people at Il Fornaio for coffee or a meal.

I loved the very casual and congenial atmosphere of Silicon Valley. No one dressed up. People enjoyed being at work; they had fun and were inspired to do their best creative work. It was so different from the atmosphere that defined the offices on the East Coast and on Wall Street.

The level of programming talent in Silicon Valley was jaw dropping. Only there could we hire someone like Jef Raskin, the guy who designed the user interface for the Macintosh. Literally, he was the human-computer interface expert who was credited with designing the look and feel and the user experience of the Macintosh project for Apple in the 1980s. He was also a believer that the health care industry was ripe for improvement, and he had been thinking a lot about how to do it. We gave him our vision of building a system that tied together all the computers on the ICU floor and how we could use it to save lives. He loved the idea and we convinced him to join us. He did incredible work.

With Jef’s lead, we built something called the ZUI, the zooming user interface, and it was very cool. You could zoom out and see the entire ICU floor, all the patients, and all their vital signs. You could see flashes going on at the different beds when there was a problem. Then, you could put your finger on the flash and zoom directly into that patient, as far as you wanted to go. It was very fast and very comprehensive, providing a holistic, real-time view of everything going on with every patient. One of the breakthrough features was that the data went across patients so we could tell if there was a trend happening. For example, we could see if patients acquired infections that when detected could be stopped before they became lethal. Other lifesaving features included a real-time check for all medicine being prescribed and delivered for drug-to-drug interactions, another cause of unnecessary deaths in hospitals.

Show Me the Money

But there was something else to contend with when it came to hiring top talent, which I hadn’t anticipated. In Silicon Valley, it seemed that everyone was one degree of separation from someone who had gotten very rich from being early at a start-up that made it big. That was the game, the goal, and everyone was gunning to be on that get-rich-quick list. As an employer, it was crucial for me to show the monetization opportunity and the exit strategy. In fact, that seemed to be a prospective employee’s primary consideration. As I interviewed developers, I immediately discovered that they knew more about stock options than I did—and I came from Wall Street! They wanted to know what percentage of the company their options represented, and it became clear that if we could not show incredible progress in increasing value within six months, they would move on to their next opportunity. It was difficult to build a company where it felt like everyone was a mercenary.

Know When to Pack It In

We had a great mission with our medical technology. We made a product designed to save lives for an industry in severe need of technology and efficiency with a breakthrough interface so simple doctors and nurses could use it without any training. One would think that everyone should have been interested.

But soon I learned another lesson: Incredibly, sometimes a great mission and a lifesaving application is not enough.

We sought to raise money and approached 15 to 20 venture capitalists in the Silicon Valley area. We got in the door, but it then quickly slammed on us. Everyone we met had the same response. They had seen the same problem and opportunity that we did. In fact, they had all put money into tech companies that tried to take on and solve various problems within the health care sector—and they all had lost money. One of the last venture capitalists we saw summed it up rather bluntly, “You are dealing with a very poor and stupid prospect base—there are easier ways to make money.”

I’m not sure I’d be that harsh, but the fact was it did feel like we were pushing a boulder up a mountain. We had some initial interest from hospitals, but we couldn’t get them to sign a contract. We learned the chief technology officers of hospitals had an average tenure of 18 months. That’s very brief—and it made them unwilling or unable to take a chance on a new software platform regardless of how many lives it could save or how much money it could save the hospital. They had the “you never get fired by buying IBM” mentality.

We were running out of money, and without a ready prospect base and rejections from every venture capitalist for primarily the same reason, it became very clear to me that this was not going to work.

This was difficult for all of us, but the founder took it hardest—and lashed out at the rest of us. Every time we were rejected by a venture capitalist or a doctor at a hospital, it pushed him a bit further over the edge. He always felt that someone other than himself was to blame: the developer, the product manager, me. He was the visionary and the domain expert in the space, so I couldn’t run the business without him. As he became more erratic, it became very clear I didn’t want to run the business with him. I had invested a lot of money and, more importantly, a lot of time away from my family. It was time to pack it in.

You Can Learn a Lot from Failing

Ultimately, we failed hard. But we failed quickly. It all went down in nine months. The other positive is that the experience taught me as much as any of my successes—maybe even more. Going to Silicon Valley was my very best mistake. I’m not just talking about the lessons I learned from failure (you don’t actually know everything just because you’ve done it before), but the lessons I learned in Silicon Valley I brought back with me.

While I couldn’t bring the operational principles of the new order management system to health care, I was inspired by the principles of the latest in technology, innovation, and openness that defined Silicon Valley, and I believed those could be applied to Wall Street.

I learned a great deal about technology, including peer-to-peer technology, the next generation of computing architecture that could have incredible advantages over client/server architecture if applied correctly, and the value of focusing on the user experience. At the time, no one on the East Coast was even looking into peer-to-peer architecture or the user experience. In fact, we hired a consulting firm when we started Liquidnet to help us design our platform, and they recommended client/server technology. Peer-to-peer was much better for our new business, and I only knew about it because of my time in Silicon Valley, where people were much more willing to try new technologies and new models. The Bay Area was a few years ahead of the East Coast—and that put me a few years ahead of my competitors when I returned.

My crash course in user interfaces (UIs) and design was also critical to our eventual philosophy at Liquidnet. Through working on the UI with Jef Raskin, who was so integral in the history of personal computers, I learned the value of design. The Macintosh and all its applications shared a common interface, and Jef introduced me to the importance of making everything intuitive and simple. My prior experiences had been with Microsoft, where there was not nearly the attention paid to making the UI intuitive or attractive. The financial world was built around Microsoft products, and the applications were uniformly ugly and difficult to use. It’s still the case: the Bloomberg terminal is the most used application in finance, and it’s still archaic, with most users typing commands to navigate the system.

What I saw in Silicon Valley later inspired me to bring design to a financial application. When we were developing Liquidnet, our goal was to make the system so simple and intuitive that the instructions had to fit on the back of a business card. We kept that mandate when we released it. If there was a feature that was too complicated to explain, we simply took it out. Our goal was for anyone to be able to sit down and get running on the software within 60 seconds.

I learned another important lesson as well. I had to admit that my forays in angel investing didn’t work out well. I realized I was not good at it and I didn’t enjoy it. I had to again build something on my own. Instead of investing in others, I needed to invest in myself. It’s the only way I’ve made money. And it’s been a lot more fun and definitely more rewarding.

In my new endeavor, I would bring everything I learned over the years and it would operate differently than any company I had been involved with before. Working on both coasts kept me away from my family for two weeks a month, but it also meant that I was home for two weeks not working in an office. During that time, I took my kids to school in the mornings and I picked them up in the afternoons. It was the first time I met their teachers and knew their afterschool programs. I attended their events and ceremonies and I loved it. While at Merrin Financial I was always at work. Now, I knew how much I had missed at home. It never occurred to me how uninvolved I was in my kids’ lives and how unbelievably rewarding it was to spend that extra time with them during their formative years. I’m not sure how much it occurs to others who are building their careers, but once I understood what I had missed, I didn’t want to miss any more. The importance and priority of family time is something I wanted to encourage in my next business.

I failed in California, but I didn’t come back to New York dejected. I returned to the East Coast energized. I brought new ideas with me, and those insights are what led me to my next adventure.